Advanced Television

Sky Germany: “Murdoch to (eventually) take control”

April 24, 2013

By Chris Forrester

Sky Deutschland will reveal its latest numbers on May 3rd, a week earlier than usual and ahead of its numbers being consolidated into News Corp, which declares its own results a week later on May 8th.

Sarah Simon, an analyst at Berenberg Bank, in a note to clients says not to expect too much from this quarter’s Sky Deutschland results. “Q1 is usually a low period for customer acquisitions, and in 2013 will have been affected by the end of outbound telemarketing, as announced earlier this year. Customers acquired by this means have historically had higher-than-average discounts and have exhibited greater levels of churn than the overall base. We view positively that management is not chasing subscriber growth for the sake of it, and is focused on improving the quality of its customer base,” says the bank’s note.

Berenberg maintains a ‘Buy’ rating on Sky Deutschland and a target price of €5.15 (its share price is now about €4.19). Nevertheless, Sky Deutschland should still generate growth of about 43,000 net additions (73,000 a year ago), and because of tougher credit controls a rise in churn from last year’s 11.5 per cent to 12.2 per cent currently.

Simon’s overall sentiment on Sky Deutschland is positive. “We expect Sky-D to deliver strong growth in profitability over the next few years, justifying its strong appeal to shareholders. As a consequence, we remain of the view that News Corp will seek to take full control of Sky-D,” she says.

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